Discontinued Operations

3 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Real Estate Assets Held for Sale

As of March 31, 2014, the following undeveloped land parcel was classified as held for sale:

Location	City/Submarket	Property Type
10850 Via Frontera, San Diego, CA	I-15 Corridor/Rancho Bernardo	Undeveloped Land

On April 9, 2014 the Company completed the sale of the undeveloped land parcel. See Note 16 “Subsequent Events” for further details.

The major classes of assets and liabilities of the properties held for sale as of March 31, 2014 were as follows:

Real estate assets and other assets held for sale	(in thousands)
Undeveloped land and construction in progress	$	28,030
Prepaid expenses and other assets, net	242
Real estate and other assets held for sale, net	$	28,272
Liabilities of real estate assets held for sale
Accounts payable, accrued expenses and other liabilities	$	634
Liabilities of real estate assets held for sale	$	634

Dispositions

The following table summarizes the properties sold during the three months ended March 31, 2014:

Location	City/Submarket	Property Type	Month of Disposition	Number of Buildings	Rentable Square Feet
San Diego Properties, San Diego, CA (1)(2)	I-15 Corridor/Sorrento Mesa	Office	January	12	1,049,035

________________________

(1) The San Diego Properties included the following: 10020 Pacific Mesa Boulevard, 6055 Lusk Avenue, 5010 and 5005 Wateridge Vista Drive, 15435 and 15445 Innovation Drive, and 15051, 15073, 15231, 15253, 15333 and 15378 Avenue of Science.

(2) These properties were held for sale as of December 31, 2013.

At March 31, 2014 and December 31, 2013, approximately $15.3 million and $32.2 million, respectively, of net proceeds related to the buildings disposed of during the three months ended March 31, 2014 and the year ended December 31, 2013 were temporarily being held at a qualified intermediary, at our direction, for the purpose of facilitating Section 1031 Exchanges. The cash proceeds are included in restricted cash on the consolidated balance sheets at March 31, 2014 and December 31, 2013. In February 2014, we successfully completed one of the Section 1031 Exchanges and the $32.2 million cash proceeds were released from the qualified intermediary.

For the three months ended March 31, 2014 and 2013, discontinued operations included the income of the twelve operating office properties sold during the three months ended March 31, 2014. For the three months ended March 31, 2013, discontinued operations also included the income from three operating office properties that were sold during 2013. The following table summarizes the revenue and expense components that comprise income from discontinued operations for the three months ended March 31, 2014 and 2013:

	Three Months Ended March 31,
	2014		2013
	(in thousands)
Revenues:
Rental income	$	458	$	5,773
Tenant reimbursements	66		757
Other property income	9		3
Total revenues	533		6,533
Expenses:
Property expenses	87		968
Real estate taxes	69		673
Depreciation and amortization	—		2,690
Total expenses	156		4,331
Income from discontinued operations before net gain on dispositions of discontinued operations	377		2,202
Net gain on dispositions of discontinued operations	90,115		—
Total income from discontinued operations	$	90,492	$	2,202